Hospitality could create more than 500,000 new jobs in the next five years

Posted July 3rd, 2017

The hospitality industry’s contribution to the UK economy has grown faster than any other sector since the economic downturn in 2008 and new research predicts that over 500,000 new jobs could be created in hospitality in the next five years. Labour productivity in the sector has grown at more than double the growth rate of the overall economy, according to two new reports from the British Hospitality Association (BHA), the leading hospitality and tourism trade body.

The research, by Ignite Economics, also confirms hospitality and tourism as the UK’s fourth largest industry, employing 4.6 million directly and indirectly. Last year it provided £161bn to the total economy, £15bn in exports and £38bn in direct tax receipts. Around 17 per cent, nearly one in five, of all jobs in the UK is now related to the hospitality and tourism sector. The jobs are spread around the country with hospitality ranking as a top six employer in every region of the UK.

Ufi Ibrahim, the chief executive of the BHA: “The two reports, into productivity and economic contribution, show the colossal value of hospitality and tourism to the economy and the wellbeing of the country, but points out that the growth outlook is highly uncertain, given the pressures of falling real living standards, the costs of implementing the National Living Wage, increases in business rates and the potential lack of labour following exit from the EU.

“We need the Government to step up and support our industry by reducing tourism VAT, working with us to reduce the dependence on EU workers and increase the number of UK workers joining the hospitality industry, allowing the Low Pay Commission to set the National Living Wage and to bring forward a fundamental review of Business Rates.

“We are the front door to the UK and are fundamental to ensuring the UK remains open for business. With the right strategic support from government, economic stability and access to labour we believe that hospitality and tourism can continue to grow and become a career of choice for more and more people.”

Ed Birkin, founder of Ignite Economics, said: “Labour-intensive industries appear to be out of vogue with the current Government but they provide a key role in job creation, preventing significant socio-economic issues associated with high levels of unemployment. In the current climate of economic uncertainty, it is more important than ever to promote industries with strong economic fundamentals.

“The hospitality sector has returned the highest levels of GVA growth and labour productivity improvements of any industry since the economic downturn, combined with a significantly improved use of capital at a time when the overall capital efficiency of the economy has deteriorated. However, there are a number of potential headwinds facing the sector, and the extent of these will determine whether the industry can continue to be a key driver of growth for the UK economy.”